Construction worker shortage growing more severe

Construction workers smooth out cement along a barricade between the access road and the nearly completed Wurzbach Parkway near U.S. Highway 281 earlier this month. A new Associated General Contractors of America survey conducted this summer found 88 percent of Texas construction firms that responded said they had trouble filling positions. One reason is that demand has increased as the number of road, housing, school and corporate projects have grown along with the state’s population.

Construction workers smooth out cement along a barricade between...

The national construction worker shortage is widening.

A new Associated General Contractors of America survey conducted this summer shows that 86 percent of construction firms are having trouble filling craftsmen and professional positions, up from 83 percent in 2014 and 81 percent in 2013.

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The shortage is worse in Texas, where 88 percent of 116 survey responders from the state said they had trouble filling positions.

The shortage has a ripple effect across the economy. Construction companies are bidding on fewer projects, raising project costs for local and state governments. Contractors and subcontractors are walking away from partially constructed buildings because they don’t have the workers. Sometimes, work has to be redone because it wasn’t performed correctly the first time, delaying completions.

Georgia is an example of a state warning school districts that new school buildings planned in 2016 won’t be finished on time.

The shortages are growing despite higher pay, better benefits and more incentives being offered by construction companies, many of whom are still losing workers to other construction companies offering even better terms.

One reason the situation is worse in Texas is that the state has twice the population growth rate as the rest of the nation, meaning high demand for single-family and multifamily residential construction, said Ken Simonson, AGC of America chief economist.

School, road and corporate projects are on the upswing, too, in Texas.

“We’re pretty right along with the survey results. We have an aging workforce. We have increased wages,” Michael Sireno, president of San Antonio-based BakerTriangle, told reporters during a national telephone news conference.

The construction industry essentially is still trying to recover from the 2007-09 recession that was so severe it depressed construction activity for several years after it officially ended. Older construction workers retired. Younger ones left because they no longer could stomach the ups and downs of the industry cycles.

“When they do this two or three times, people get fed up with it. It doesn’t take care of their families,” said John Finch, CEO of PBG Builders Inc. in Goodlettsville, Tennessee.

The worker shortage is more entrenched this time around because “it is lot harder to bring in workers from outside the country. Also, there were more retirees (during the recession.) The length and depth of the recession emptied out workers. There is a lack of people coming out of high school because they (earlier grads) couldn’t find work (during the recession years). The consequences (of this recession) are going to last longer,” Simonson said.

In Texas, one disappointment is that oil field workers laid off because of stubbornly low oil prices are not immediately returning back to construction or trying to enter for the first time in the numbers Texas construction industry leaders had hoped.

“We have not seen the migration from the energy industry. There have been a few,” Sireno said. “I’ve talked to them (laid-off energy workers). They say they are holding out to see if things pick up in the oil fields before returning to the construction industry.”

“I do know of some laid-off energy workers who did enter the construction workforce but not to the extent we hoped,” confirmed Doug McMurry, executive vice president of the San Antonio AGC chapter.

McMurry early this year said San Antonio-area construction firms would embrace laid-off energy workers. The San Antonio AGC chapter followed up with a job fair in April. Last year, a website — http://texasconstructioncareers.com — was started to list job openings and provide information on available training programs.

“We’re on the forefront of providing training” for new and returning construction workers, McMurry said.

Aside from trying to recruit employees coming out of school and trying to lure lost construction workers back to the industry, construction companies are trying to increase efficiency by relying more on off-site prefabrication of panels, walls and other components, owners said during the news conference.

Meanwhile, the industry is growing disenchanted with the education system pipeline, partially because public schools are focusing less on vocational courses.

San Antonio may be somewhat better poised in that aspect with the Construction Careers Academy at Warren High School and the four-year construction sciences program at the University of Texas at San Antonio.

But the trends still are not positive.

“This story is not over yet,” McMurry said.

If the situation continues to worsen, look for higher prices for new houses, possible tax increases to pay for roads and schools, and for public projects to face delays.